Head of state and government: King Taufa’ahau Tupou IV, assisted by Prime Minister of Privy Council Baron Vaea

The midyear celebrations for the 80th birthday of King Taufa’ahau Tupou IV provided a sense of national unity in an otherwise controversial year. The Supreme Court ruled that a statement in The Wall Street Journal by ’Akilisi Pohiva, leader of Tonga’s pro-democracy movement, that the king was an authoritarian ruler appeared true and not defamatory. There was also political controversy over revenue from Earth-orbiting satellite slots claimed by Tonga and managed by a company 60% owned by the king’s daughter, Princess Pilolevu. In November Tonga broke diplomatic relations with Taiwan and established them with China.

Economic growth slowed as the Asian financial crisis caused a decline in tourists from that region and lower remittance income from Tongans working overseas. Government expenditure approved for 1998-99 totaled T$129 million ($80.4 million).

Climatic conditions caused a further decline in economic activity. In January Cyclone Ron caused widespread damage that particularly affected the northern islands. Heavy rain in February caused serious losses in food crops.